The Chinese solar thermal industry has set up a highly organised distribution network based on more than 50,000 solar shops all around the country. The market researchers of the Sun´s Vision, located in Dezhou, estimate that around 20,000 of these shops are franchise businesses, which deal in one brand only. They belong to one of the top four collector manufacturers Himin Solar, Sunrain Group, Sangle Solar or Linuo Paradigma. The photo shows a franchise partner shop of Linuo Paradigma (left) and Sangle (right) in the city of Jinan, Shandong province. Most shops, however, sell more than one brand of solar energy equipment.
Photos: Bärbel Epp
Linuo Paradigma has 1,500 first-class retail shops country-wide. Altogether, the company supplies system kits to around 18,000 financially independent solar shops. These shops sell the systems to the end consumer. They also employ the installation teams who set up the system and are paid by the shop owner. The owners of the first-class shops are required to use the logo and marketing material of the systems’ manufacturer, as well as pay a license fee of RMB 20,000 per set sold. In general, the solar shops sell systems at a fixed price, which is set by the system supplier – in this case, Linuo Paradigma. Prices range between RMB 2,500 and 6,000. Discounts are defined by the supplier’s main sales department; there is no room for additional rebates. Installation costs are included in the fixed gross system price that is shown on the system. These costs have to be covered by the shop owner’s own sales margin.
Himin Solar supports and supplies 5,000 solar shops across China. It also runs show rooms in any larger city. To improve its sales network, the company has just started a reinforcement programme. “We have sent out 200 Himin employees to work with shop owners on a daily basis and improve their sales strategy,” Jiuwei Wang, Deputy General Manager and Chief Marketing Director of Himin, explained in February 2012. The employees’ salaries are paid partly by headquarters and partly by overhead left from additionally sold systems. “The franchise businesses are satisfied with the support they get, which is why we are planning to extend the training to other shops,” confirms Wang.
Sunrain Solar works with around 3,000 dealers at the first sales level. “We help our regional sales representative to choose a matching second sales level, so that each dealer has several distributors, with each of them running a shop to deal with the end consumer,” explains Chen Liang, Marketing Planner for International Business Development at Sunrain Group, and confirms: “Our distributors on the second sales level have an exclusive sales area. But, if they do not reach their goals, they’re out.” Sunrain does not count the exact number of shops they are working with across the country.